President Biden's Infrastructure Bill May Be Designed to Strengthen Organized Labor

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President Biden is in the process of proposing his second multi-trillion bill, on infrastructure, with a third multi-trillion bill to follow thereafter. Unlike President Obama's infrastructure bills, however the infrastructure bill produced in April, called the American Jobs Plan, would require employers benefitting from an infusion of infrastructure funds to pay prevailing wages and stay neutral in union organizing efforts.

The proposal can be as far reaching as the PRO Act since as many as one in every four workers is associated with a federal contractor. The legality of a union neutrality clause might be legally attacked in court on the grounds that it is pre-empted by the National Labor Relations Act, but the President's decision to fire a Trump-appointed NLRB General Counsel in the first 23 minutes of holding office, shows his intent to carry out his campaign promises of being the most pro-union American President in history, regardless of potential legal risks. In contrast, President Obama's infrastructure bills did not include the addition of policies aimed at increasing union membership. The President may have a greater opportunity of moving forward in his pro-union agenda in the infrastructure bill, because the Administration may need only a majority vote instead of the 60-vote margin required under the Senate's filibuster rules. The strongest opposition to the Biden infrastructure bill may come from the 33% increase in corporate income taxes (21% to 28%) he proposes to pay for it, while some progressive Democrats demand that it does not spend nearly enough. Senate GOP Leader Mitch McConnell calls Biden's plan a "Trojan horse" for tax hikes and liberal social policy changes having nothing to do with infrastructure. There are further complications because a number of progressive Democrats in the Northeast will not support the bill without ending the cap imposed on state and local tax deductions, a change which would onlybenefit the very rich. Some also argue that these multi-trillion dollar federal programs will add more heat to a hot economy, resulting in inflation and other adverse consequences, a position held by President Obama's Economic Advisor, Lawrence Summers.

This is part of our May 2021 Newsletter.

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